Can aviation sector ever give a multibagger for market

Aviation  stocks are always a nightmare for long term investors,indian aviation sector has never seen a profitable company other than indigo airlines,however it is not listed on bourses. But a close view towards aviation scrips reveal something interesting, they are more cyclical stocks,they crash suddenly,rise again,get hammered in small span of time,this provides an opportunity for short term trading play.The most negative factors for aviation companies is High aviation turbine fuel costs,poor infrastructure, high taxes,as long as these factors play role we cant expect aviation scrips to outperform,But the point here one should consider is due to exit of kingfisher airlines other players have picked kingfishers market share and it would reflect in the other players financial statements. The recent UPA governments move to allow 49% fdi raised curtains for loss making airlines to invite foreign big players to invest in their companies,Till now two deals have come through,one is tata-airasia-telestra and jet-etihad.
The operating margins of airlines were on stress continuously due to weaker rupee,as they need to imports of aviation turbine fuel,apart from this states tax are also heavy,but as rupee seen stabilizing in near term there can be a slight up move in aviation scrips,however things are not going to be better in a hurry.But there is some optimism going around this sector,traditionally air traffic seen picking up in later quarter of the year.Many airlines have recently increased the fares which is taken on a positive note by the market,there are only two options left for investors in airlines sector after crash of kingfisher i.e jet and spice jet,industry says there are speculative investments in jet and spice jet,but taking into consideration recent fdi acceptance and chance of any deal striking with equal probability of increasing fares further provides investor to go for a short term play.

Gold Financing Companies,Is it Time To invest??

Manappuram and Muthoot Finance are two comapnies which positioned themselves as strong performers in Gold loan business,infact it is great achievement in Indian markets where people are addicted to traditional method of taking loans with goldsmiths.Recent guidelines of Reserve bank of India would have a negative impact on these companies as it would lead to pressure on their operating margins,so in the near term these regulations will have negative impact on their performance. while the loan-to-value (LTV) ratio will restrict growth in assets under management of these companies,stricter KYC norms like pan card for loan over 5 lakhs would turn borrowers again to un organised lenders for their credit needs. The business model of gold loan companies was centered on higher ltv and quick turn around time.These guidelines would impact both and would lead to decline in their loan portfolios. since interest rates on lower LTV loans are lower and operating expenses of gold loan non banking finance companies are fixed in nature,the decline in profitability would be higher than decline in loan book,so these stocks are being hammered now and would underperform for some more sessions.while the RBI had earlier capped LTV for goldloans to 60 %,it has standardised the method to calculate gold value. companies will now have to take the average price of 22k gold in line with bombay bullion association to arrive at the value of gold. The rbi also said the making charges cannot be included in LTV. this becomes important as most gold financiers include making charges in LTV and take up their  effective ltv ratios to 70 percent. This will result in lower yeilds.Muthhot and manappuram may loose to competitors specially from the unorganised segment. since gold loan companies charge 22-24% interest rates and banks 13-15%,the differential will now narrow. The rbi has also mandated prior approval for opening more than 1000 branches and to have appropriate facilities for gold storage,however muthoot and manapuram has more than 1000 branches so this norm would  have no impact,.however rbi will have direct expansion of these players in the longer run. verification of gold ownership for over 20g and cheque disbursement of loans over 100000 will also reduce the competitiveness of gold financiers and increase their paper work.

Is It Time To Invest Across The Globe??

 Global funds are a way to diversify ones portfolio, one can invest in global funds with the time horizon of three-five years. Global funds like Franklin US opportunities gave returns of around 41%, ICICI  US prudential US bluechip equity gave returns of 38% and Dsp blackrock US flexible equity gave 36%. Investors in global  funds are seeing strong double-digit gains on their investments as the rupee has weakened considerably against the dollar. global funds give diversification and participation in equity assets in foreign countries. This diversifies the geographical risk of investing only in rupees as investors get exposure in dollars.,thus investors are not only investing but hedging their risk if rupee falls.. Investing 15-20% of your portfolio in these is a good way to diversify,over one lat year indian markets have stopped giving returns for long term investors,diversifying in other economy helps the portfolio to make money. These also give exposure to themes such as global agriculture or south american equity  or equity exposure of US markets,This year many fund houses filed offer document to securities and exchange board of india to launch global schemes. Analysts say ideally one should invest in dollar denominated funds that invest in equity assets overseas,however global funds should not exceed 15% of the portfolio. However these funds can also be used to hedge against currency risk for goals such as education abroad. This is a good way to hedge for goals like saving for childs foreign education down the line. But you need to have a long term view of atleast five years when you link investments in global funds for goals like  foreign education as timing currency movement is very difficult.